‘One Jurisdiction, Two Regimes’ : A Proposition for Provisional Supervision Procedures in Hong Kong

In the post Global Financial Crisis economic order, having robust formal corporate rescue procedures maybe critical for a company facing financial distress, otherwise liquidation means a ‘lose-lose' proposition for both shareholders and creditors. Whilst the hold up for such legislation in Hong Kong had primarily been political, the territory should also explore more innovative ways to enhance creditors' confidence instead of merely transplanting British laws. In addition, Hong Kong has one of the largest concentration family companies in the world that are influenced by Confucian values. This cultural factor meant that the stigma of corporate rescue might discourage these types of companies from seeking formal rescue. Therefore, reformers should consider having two types of rescue mechanisms, one for the non-family and public companies, another for the Chinese family companies to ensure companies can survive short term liquidity problems